MUNICIPAL FINANCING STRATEGY DEVELOPMENT IN INDONESIA

The Urban Team of the World Bank aims to bridge the infrastructure
gap in Indonesia by improving infrastructure and public service
delivery at the subnational level through loans, technical assistance,
and capacity building. The World Bank enlisted a Capstone team to
identify the infrastructure needs and priorities of two Indonesian
cities: Jakarta and Bandung. The team analyzed financing needs,
economic conditions, fiscal capacity, institutional capacity, and policy
constraints, and identified stakeholders and suitable financing for
selected development areas. The team’s assessment of infrastructure
funding strategies revealed that an integrated financing framework
could help reduce existing financing gaps, in furtherance of which
the team collected data to assess and diagnose the financing and
expenditure strategy. The team’s final report pinpoints relevant
stakeholders for each infrastructure project and highlights potential
own-source revenues to optimize local revenues.